Customer Lifetime Value: The Next Level of Digital Marketing
The next big advancement in digital marketing is the Customer Lifetime Value model. Fortunately, V Digital Services is on the brink of this advancement in collaboration with Google through our Premier Partnership. Only two agencies in the world have access to this tool and V Digital Services is one of them! Right now, only eight companies are using this model, including Disney and Priceline. This is a huge advantage for V Digital Services!
With the Customer Lifetime Value tool, Google has granted us access to a $300,000 platform for absolutely free that evaluates the cost of a customer throughout their lifetime that allows us to use this data when targeting on PPC.
It takes customer transaction data and predicts how much those customers will spend in the future, which has two benefits:
1. It allows us to put a specific value on each unique customer, which tells us how much we can spend on converting that user and drive ROI.
2. It allows us to predict those customers’ revenue for the next 12 estimated months.
To provide you with an example, let’s use Starbucks coffee:
A regular, black coffee at Starbucks cost $1.85. The cost-per-conversion on a user may be closer to $2.50-$3, so the ROI technically is under from these metrics.
The customer journey doesn’t end with that first cup of coffee purchased though. That customer will continue to purchase week after week.
The Customer Lifetime Value tool will allow us to predict what that value is.
When run, it estimated that one customer that purchases a $1.85 coffee based off of their purchasing trends is really valued at $14,000 over the lifetime of a customer. Knowing that information, we can then say that the budget to convert and retain this customer should be higher resulting in an excellent ROI for Starbucks.
The tool is available to all potential clients looking to advertise with VDS.
In order for a client to qualify for this tool, they need the following assets:
- 10,000 customer records (transaction ID, patient ID, loyalty member ID) in the last 12+ months
- Dates for each record
- Unique customer ID numbers
- Minimum spend of $9,000 per month for 12 months.
This initiative will help V Digital Services reach our goal of a $1million spend per month for the paid department. This initiative also outlines the relationship and advantages that we have with our Google Rep, Tom Hammel, through our Premier Partnership.
The next level with the Customer Lifetime Value model is, again, very data-centric and scientific. It is a complex and in-depth strategy that will drive results.
V Digital Services is devoted to educating and implementing this model for all future qualifying clients. For questions, concerns or to inquire if a current/potential client qualifies for this program, please reach out to Terese Cilluffo (Team Boost Manager), Carlos Mendez (PPC Manager) or Taylor West (Fulfillment Operations Manager).
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